FinCEN Proposes Rule to Basically Reform Financial Establishment Packages Designed to Struggle Illicit Finance

WASHINGTON—Today, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued a proposed rule meant to basically reform monetary establishments’ anti-money laundering and countering the financing of terrorism (AML/CFT) applications beneath the Bank Secrecy Act (BSA). The proposed rule helps Treasury’s efforts to modernize the U.S. AML/CFT regulatory and supervisory framework, and to in the end cut back compliance burden. The proposed rule would promote risk-based, fairly designed applications and larger consistency in how banks are evaluated for effectiveness.

“For too long, Washington has asked financial institutions to measure success by the volume of paperwork rather than their ability to stop illicit finance threats,” stated Secretary of the Treasury Scott Bessent. “Our proposal restores common sense with a focus on keeping bad actors out of the financial system, not burying America’s banks in more red tape.”

The proposed rule introduces the next key reforms to AML/CFT program compliance and supervision:

• refocuses compliance obligations and expectations on effectiveness by distinguishing between deficiencies stemming from program design and implementation;
• reinforces Treasury’s perception that monetary establishments are finest positioned to establish and consider their illicit finance dangers;
• empowers monetary establishments to dedicate extra consideration and sources towards greater dangers somewhat than towards decrease dangers;
• clarifies expectations associated to sure program necessities and features—together with unbiased testing and audit features—to make sure that examiners and auditors don’t substitute their subjective judgment instead of monetary establishments’ risk-based and fairly designed AML/CFT applications; and
• affirms FinCEN’s central function in AML/CFT supervision, together with by means of the introduction of a discover and session framework between Federal banking supervisors and FinCEN with respect to vital AML/CFT supervisory actions.

The proposed rule would revise FinCEN’s laws to replicate statutory adjustments made by the Anti-Money Laundering Act of 2020. This proposed revision of AML/CFT applications totally supersedes a previous proposed rule FinCEN revealed on July 3, 2024, and FinCEN is withdrawing that proposed rule.

FinCEN welcomes public touch upon the proposal, which will likely be revealed within the Federal Register within the coming days. Comments should be obtained 60 days after publication of the NPRM within the Federal Register.

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